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Security Trust & Savings 


The cattle-raising industry 
of the Southwest 


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The Cattle-Raising Industry 
of the Southwest 





The Cattle-Raising Industry 
of the Southwest 


Department of Research and Service 

Security Trust & Savings Bank . L^^ n ^^ 

Prepared by 



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The Cattle Industry in the Southwest 

THE importance of Los Angeles as a live stock center of the great South- 
west needs no argument. Surrounded by the vast ranges of Nevada, 
Arizona and Southern California, and with adequate rail service link- 
ing tliese sources of production with the abundant alfalfa pastures and beet 
fields of the southern coast, Los Angeles has become conscious of her strategic 
situation. Growers of the neighboring citrus belt bid for the nitrogenous 
refuse of feed lots, modernly equipped packing plants are at hand for the re- 
duction of animals to food, a million people within immediate reach assure 
an unfailing market for beef and by-products, and the regular service of re- 
frigerator ships and railway cars to the high price beef markets of the East 
would guarantee an outlet for any possible surplus. 

Cattle raising is directly and indirectly a source of great wealth to the 
City of Los Angeles and environs. Any danger to this essential industry, such 
as is threatened by the recent decline of cattle prices to below cost of produc- 
tion, must be met. This can only be accomplished by proper financial sup- 
port, and by the intelligent co-operation of the general public. 

In view of these facts, and in keeping with the purpose of the Security 
Trust & Savings Bank carefully to gather data and to publish from time to 
time unbiased information upon agricultural and industrial conditions, and 
other subjects of business import, the following report of conditions now 
existing in the cattle raising industry of the Southwest has been prepared. 

Sources of Information 

Investigation of the industry has in- 
cluded conferences with cattle raisers, offi- 
cers of packing houses, cattle loan associa- 
tions, feed yard owners, butchers and cat- 
tle buyers. From a review of the opinions 
thus collected there is presented what is 
thought to be a fairly accurate picture of 
the present situation as it appears to va- 
rious interests involved. 

To determine actual statistical facts, 
census reports have been examined and 
compared to ascertain the number of cat- 
tle in various regions, with particular ref- 
erence to their increase or decrease. Price 
trends have been established by examina- 
tion of records kept by stockmen, packers 
and retail meat buyers, and from current 
market reports. Recourse has been had 

to publications of the United States De- 
partment of Agriculture and of Federal 
Reserve Banks for information concern- 
ing crop and weather conditions in dif- 
ferent sections of the Southwest. Com- 
parative periodical receipts of beef cattle 
at slaughtering centers, and shipments of 
stocker and feeder cattle back to the ranges 
have been determined from similar official 
sources. To discover the volume of cattle 
paper dealt in by cattle loan associations 
and by banks rediscounting through the 
Federal Reserve Banks, access has been 
had to books of loan associations at Los 
Angeles, and records of live stock paper 
kept by the Federal Reserve Bank at San 
Francisco. Data concerning present con- 
ditions existing in cattle regions, such as 




shortage of feeders and abnormal slaughter 
of female stock, have been furnished 
through the co-operation of such organiza- 
tions as the California Cattlemen's Asso- 
ciation, the American National Live Stock 
Association, and the Institute of American 
Meat Packers. 

Financial Difficulties 

Beef cattle producers are undergoing a 
period of deflation and of liquidation at 
prices under cost of production not un- 
like that being experienced by farmers, 
and indeed by most other producers in the 
country. The suffering among cattle rais- 
ers, however, is apparently more acute 
and relief more difficult to obtain. Their 
products have been probably the first to 
drop to a pre-war price, and the usual 
sources of financial aid have become more 
and more inaccessible. Stockmen now 
find themselves with cattle on hand raised 
during the period of highest production 
costs, with feed, interest, labor and rail- 
road rates from 50% to 90% above nor- 
mal, and a present market for their stock 
which has reached a point below normal 
after a precipitate drop of 50% in eight 
months. In short, cattle which were pro- 
duced at a cost of 8c per pound and 
which were selling at 12c per pound last 
year cannot be disposed of now for more 
than 6c on the hoof. Stock raisers are 
confronted with this situation at a time 
when they are in urgent need of funds for 
the purchase of bulls and new stock to re- 
habilitate their herds, and for the pay- 
ment of ordinary running expenses this 
fall and winter, and they find money al- 
most unobtainable. Few banks are dis- 
posed to purchase cattle paper, and those 
cattle loan associations which are willing 
to make new loans, are demanding a pro- 
hibitive rate of interest. Moreover, these 
same loan associations are calling in ma- 
tured loans as rapidly as possible, forcing 
cattle raisers to sell off their cattle at any 
price obtainable, further depressing a 
badly demoralized market. Under such 
circumstances the stockmen have two al- 
ternatives: to obtain money to enable them 
to hold over for better prices, or to sell off 
everything at any price. Money cannot 
be obtained, therefore the latter course is 
being resorted to by many. Evervthing is 


being sold that the packer will buy, lean 
steers, breeding cows, heifers and calves. 

Decline of Prices 

The present low level in cattle prices 
is the logical economic result of inflated 
values and over-production during the 
war and the period immediately following. 
Cattle prices reached bottom before prices 
of most other commodities, partly because 
of unsound credit expansion permitted by 
cattle loan associations and by some of 
the banks during the war, and partly be- 
cause of the unprecedented decline of 
by-products values, a decline which in the 
case of hides amounted to 75%. Another 
cause has been a marked falling off in the 
per capita consumption of beef, thought to 
be due in part to the failure of butchers 
to reduce retail prices in consonance with 
cattle and wholesale meat prices. 

Average prices of cattle received by 
producers of the United States are given 
by the United States Department of Agri- 
culture as $6.01 (per 100 lbs.) for the 
year 1912; $10.84 for 1919, and $5.65 for 
June 15, 1921, showing a rise of 80% 
from 1912 to 1919, and a drop of 48% 
from the peak to a present price of 6% 
under that of 1912. California prices 
were $6.75 in 1912, $12.00 in 1918 and 
$6.00 in August, 1921, indicating a rise 
of 75% from normal to the peak, and a 
later drop of 50% to a point 12% below 
the pre-war figure. Meanwhile hides rose 
from $15.00 (per 100 lbs.) before the 
war, to $30.50 in 1919. and declined to 
$5.20 in March of this year. 

Average retail meat prices in Los An- 
geles increased from 20c per pound in 
1914 to 421/2 in 1920, and have fallen to 
261/^0 in August, 1921, representing a 
rise of 113% to the highest point, and a 
subsequent decline of approximately 37% 
to a point 32% above normal. 

Production Costs 

Costs of production are still above nor- 
mal. The principal factors are feed, in- 
terest on money, and labor. Range pas- 
ture which could be leased at 75c per acre 
before the war and at $1.25 during the 
war, can now be had at $1.00. Feed yard 
charges which were 25c per animal per 

day before the war, and 60c in 1919, have 
been reduced to 40c. Interest rates on 
cattle paper which advanced from 8% to 
10-12% in 1920, are still at 10%. Alfalfa 
hay in the stack now costs about $6.(X) per 
ton. This is practically the only cost 
factor which has been reduced to a pre- 
war price. 

The decline in labor costs has been 
about 35%. Cowboys who were paid 
$30.00 per month before the war and 
$90.00 in 1919-20, can now be hired for 
$55.00. It is not probable that there will 
be a further considerable decline in wages, 
but the labor item in cattle raising is com- 
paratively of little weight. 

By a process of giving to each cost 
factor its proportionate weight in the total 
cost of production, it may be calculated 
that the weighted average cost of raising 
cattle is still 50^^ above normal. 

Conditions in Different Sections of 
the Southwest 

Live stock producers in California, Ari- 
zona and Nevada have suffered less from 
the price decline than those of other cat- 
tle states. The fact that western cattle 
are mostly "range fattened" has made it 
possible for raisers in this region to hold 
their animals for better prices without in- 
curring heavy expenses for feed. Com- 
paratively few substantial stockmen in the 
West have been forced into liquidation, 
though all are seeing hard times. Failures 
have occurred for the most part among 
speculators operating with very little cap- 
ital of their own, but with funds bor- 
rowed at excessive interest rates. The 
elimination of such individuals will have 
a health-restoring effect on the industry 
as a whole. 

Arizona has been hard hit by the drouth 
this spring and cattle raisers in the south 
have lost as high as 25% of their stock. 
Rains have come at last, however, and 
pasturage conditions are now said to be 
excellent. Agents of the United States 
Department of Agriculture report pastur- 
age conditions in Nevada at normal, and 
in California at about 85% of normal. 

Possibility of Cattle Shortage 

The much talked of shortage of cattle is 
more apparent than real. It is true that 
the per capita number of cattle now on 
the ranges is considerably less than that 
of last year and slightly under the pre- 
war normal, the per capita decrease since 
1910 having been 15% for California, 
23% for Arizona, and 5% for the United 
States as a whole, while an actual increase 
of 23% is shown for Nevada. Meanwhile 
annual per capita consumption of beef in 
this country has fallen from 78 pounds to 
561^ pounds, a decline of about 27%, and 
exports of beef products have declined 
75% since the spring of 1920. The al- 
leged shortage of production is therefore 
entirely a numerical one, and does not 
take into consideration the relative de- 
crease in demand for beef and beef prod- 

Price Outlook 

The price outlook for the future is 
hopeful. Exports of beef during August 
showed an increase over those of July. 
The recently imposed 30% ad valorem 
duty on imported beef cattle will restrict 
any increase in supply from Canada and 
Mexico. Surplus stock has been largely 
disposed of, and prices at Chicago have 
already taken an upward turn. 

Necessity for Improved Methods of 

One of the most important needs of the 
cattle industry is for a permanent and 
adequate system of financing. Longer 
term loans, on a sound basis of valuation, 
reasonable interest rates, and a more fluid 
discount market for cattle paper are the 
essentials. Present interest rates are too 
high to permit of a safe margin of profit 
for the producer, and terms not long 
enough to allow him to bring his cattle to 
a selling value over cost of production. 
Cattle loans must be made on a sounder 
basis of valuation than has often been the 
practice heretofore, so that cattle paper, 
enjoying easy liquidity, may bear a lower 
rate of interest. 

The $50,000,000 cattle loan pool formed 
at Chicago on June 15 to be contributed 




to by banks all over the country and ad- 
ministered by the Bankers Live Stock Loan 
Corporation, can only be considered a step 
in the right direction. The amount sub- 
scribed is of course inadequate for the 
financing of an industry of such magni- 
tude as that of live stock raising. It is sup- 
posed, however, that the initial subscrip- 
tion is to serve merely as a nucleus for the 
development of a more ample fund if the 
wisdom of the undertaking is demon- 
strated. Participation in the pool by large 
banks all over the country will stimulate 
new interest in the cattle industry, and in- 
vestigation of loan methods now under 
way should do much to reveal and elimi- 
nate unsound practices. It is to be ex- 
pected that an industry such as cattle rais- 
ing, which is so closely allied with an in- 
dustrial activity representing a greater an- 
nual production in value than any other 
one business in the United States — that of 
meat packing — will gain the confidence of 
bankers and come to enjoy the same finan- 
cial support that is afforded other essential 

Relative Importance of Cattle to the 


Although California is primarily an 
agricultural state, it ranks fifth in number 
of head and fourth in valuation of cattle 
among the beef producing states of the 
Union, being outranked in number only 
by Texas, Iowa, Nebraska and Kansas. 
"Die number of cattle (other than milk 
cows) in California this year is esti- 
mated by the United States Department 
of Agriculture to be 1,683,000, or 3.9% 
of all beef cattle in the country. The 
value is estimated at S74,052,006. Ari- 
zona has approximately 1.000,000, and Ne- 
vada 540,000 head, representing 2.6% and 
1.3%, respectively, of the total in the 
United States. Together the three states, 
California, Arizona and Nevada, there- 
fore produce 7.8% of the country's beef. 
Among farm products of the state of 
California, the 1920 census indicates that 
beef cattle rank fifth in value, being pre- 
ceded only by hay, orchard fruits, citrus 
fruits, and grapes, in the order given. 

Future of the Industry 

The margin of profit to be realized 
from cattle raising in California has be- 
come narrow. Competition of agricul- 
tural and horticultural products has stead- 
ily forced live stock raisers to the less fer- 
tile areas, and the cost of leasing land, or 
of interest on purchase money, has risen 
to the point of bringing cost of produc- 
tion too near to possible selling price. 
Cattle interests must work toward a classi- 
fication of ranges, whereby stock will be 
bred and raised through the first two 
years on cheap ranges or possibly on free 
grazing districts or forest reserves, leaving 
the more expensive finishing off or fat- 
tening process for producers of alfalfa 
hay and sugar beet and cotton growers, 
who have a steady supply of inexpensive 
feed as by-products of their respective en- 
terprises. In other words, the part to be 
played by this state in the cattle raising 
industry must be largely that of a feeding 
ground for fattening grown animals. Ari- 
zona and Nevada, with their vast areas of 
cheap grazing land and contiguous govern- 
ment ranges, are better adapted for breed- 
ing grounds, where calves may be pro- 
duced and raised until ready for market 
fattening, when they may be shipped down 
to the alfalfa districts of Southern Califor- 
nia and the sugar beet fields of the coast. 
Another necessity to the cattle industry of 
this state is the development of well-bred 
stock. As the margin of profit becomes 
narrower, the amount of beef produced per 
dollar expended must be increased, which 
can be accomplished only by raising cattle 
capable of taking on weight readily. 

Los Angeles is apparently destined to 
become the center of the meat packing in- 
dustry on the Pacific Slope; first, because 
it is becoming more and more surrounded 
by cotton fields, alfalfa pastures, and sugar 
beet plantations, which may be counted 
upon to furnish a steady supply of inex- 
pensive and good feed; and, secondly, be- 
cause it is the nearest common shipping 
point accessible to the large cattle and 
sheep ranges of the Southwest. 

Principal Factors in the Cattle Industry 

Distribution of the Cattle Supply 

Cattle are raised in every corner of the 
world, but only a few countries are im- 
portant sources of international meat sup- 
ply. India, for example, with 130,000,000 
cattle, has more than any other two coun- 
tries combined, with practically no beef 
exports. Most of the Indian cattle are 

• •• • • 

8«B Tta&olsoo 

next to India in the number of cattle 
raised, followed by Russia, Brazil, Argen- 
tina, Germany, France, Australia and Can- 
ada, in the order named. 

According to the Bureau of Crop Esti- 
mates, there are 42,870,000 head of cattle 
(other than milk cows), valued at $1,346,- 
665,000, in the United States this year. 
Texas, with 4,547,000 head (11% of all in 
the country) has nearly as many as any 
other two states together, followed by 
Iowa, with 2,969,000 head, Nebraska with 
2,650,000, Kansas with 2,075,000, and 
California ranking next. Arizona ranks 
fourteenth on the list of forty-eight states. 
Other cattle raising states, in order 
of their importance, are; Minnesota, 
Missouri, Wisconsin, New Mexico, South 
Dakota, Illinois, Colorado, Oklahoma, 
Ohio, Montana, Florida, New York, Ala- 
bama, Georgia, Michigan, Louisiana and 
Wyoming. It is interesting to note that 
New York, with 882,000 head, 
has more cattle (other than milk 
cows) than Wyoming, one of the 
so-called cowboy states, which 
has only 720,000 head. 

In California beef cattle 
raising is found 

in nearly 
every county, in 
many cases so 


Distribution of Beef 
Cattle, Based on Censoa 

of 1920 

1 dot3=1000 head of Cattle 

used as draft animals, all arc of poor 
breed, and native superstition forbids their 
use for meat. Consequently many die of 
old age, furnishing only hides and tallow 
to the market. The United States ranks 



closely allied with dairy farms that sep- for the entire state, though many cat* 
arate figures for meat and dairy animals tie are shipped r^ularly to Los Angeles 
are difficult to determine accurately. Ac- for slaughter. 

cording to the government census survey 
of 1920, the industry is most intense in 
the San Joaquin Valley counties of Kern, 
Merced, Tulare and Fresno, and the coast 
counties of San Luis Obispo, Monterey 
and San Diego. The accompanying map 
shows more completely the general distri- 
bution over the state. 

The cattle of Arizona are more or less 
concentrated about the Salt River Valley 
and other smaller tributaries of the Gila 
River. The general aridity of the state 
makes it necessary to seek the localities 
which have the 
best water sup- 
ply. There are 
very few cattle 
in the large 
desert counties of 
Mohave and 
Yuma. Of the 
entire number in 
the state, 18% 
are in Yavapai 
County, around 
Prescott, at the 
headwaters of 
the Hassayampa 
River. Other 
important dis- 
tricts are in the 
southeast, in Co- 
chise and Gra- 
ham counties, on ^ 
the Mexican and 
New Mexican 
borders. Flag- 
staff is the center 
of the northern 
region, which is 
important on ac- 
count of large 
ranges. Cattle in 
the north, how- 
ever, have been 
largely displaced 
by sheep. Phoe- 
nix, on the Salt 
River, is the beef 
marketing and 
packing center 


In Nevada the cattle region most dense- 
ly stocked is Elko County, at the north- 
eastern corner of the state, between the 
headwaters of the Humboldt River and 
close to the Idaho and Utah boundaries. 
Another important region is in Humboldt 
County, in the northwest, on the Oregon 
line. The counties immediately bordering 
on California are relatively unimportant, 
although the irrigated district around Car- 
son City is a feeding center of some 


Distribution of B««f Cattle, Census of 1920 
1 dot=1000 head of Cattle 


Methods of Raising Beef 

In the process of raising and fattening 
beef cattle, there are three types of feed- 
ing. These are employed in rotation, each 
at its appropriate season of the year. The 
first is mountain range feeding, beginning 
with the summer months, after the snow 
has melted and green grass has come up. 
The mountain range is the primary breed- 
ing ground of the cattle and the place 
where the beef crop is begun. Wild grass 
is of course the least expensive kind of 
feed, but not always the most economical 
for the production of high-grade beef, un- 
less supplemented by other kinds of fat- 
producing feed. Mountain ranges are 
found extensively in the northern part of 
California, as well as along the eastern 
boundary of the state toward Nevada and 
Arizona, and in the Coast and San Ber- 
nardino Ranges. There are 
also large ranges in the 
gion between San Diego 
the Imperial Valley. 

The second type of feeding 
is known as valley grass for- 
age. As the winter approaches 
the herds are driven down 
from the mountain ranges 
into the valleys, where they 
are fed on grass freshened 
by summer rains. It is the 
policy of stockmen to keep 
their cattle off of these val- 
ley grass pastures during the 
summer so that the feed may 
be preserved for winter. In 
times of stress like the pres- 
ent, however, winter reserves 
are apt to be used up during 
summer. Stockmen, holding 
their cattle for higher prices, 
try to feed more animals than 
their ranges will support 
When the summer pasture has 
been exhausted, the tempta- 
tion is to turn the herds into 
the pastures which should be 
kept for winter use. Such 
practices may bring disastrous 
results later in the season. 
As the winter approaches, the 
owners must either buy grain 
or other dry feed on the mar- 
ket, at high winter prices, or 

sell off surplus stock for beef regardless 
of their condition and market value. Such 
a situation may have to be faced this win- 
ter in Southern Arizona, where failure of 
pasture on account of the spring drouth 
forced cattle raisers to draw heavily upon 
their winter reserves. 

"Dry-lot feeding" is the final process in 
bringing into market condition those cattle 
which it has been impossible to fatten on 
grass. This type of feeding is usually en- 
gaged in by intermediaries called "feed- 
ers," who are usually independent of the 
stockmen and the packers. The stock rais- 
ers, running their herds in the mountains 
in summer and fattening them in the val- 
leys in fall and winter, usually select 
those ready for market as they come into 
condition and sell them for beef, retaining 
a certain percentage for reproductive pur- 
poses, so that the herds may be perpetu- 


Distribution of Beef 
Cattle, Census of 1920 

1 dot=1000 head of Cattle 





ated. Older cows and steers not fat 
enough for market, are culled out and sold 
to feeders. These {inimals of course do 
not bring as much per pound to the raisers 
as do fat cattle, but it is often more eco- 
nomical to pass them on to persons en- 
gaged in "priming" than to put them 
through another season of fattening on the 
range. In the Middle West "feeder-cattle" 
are primed on corn, but in California and 
Arizona alfalfa hay, sugar beet tops and 
pulp, and cotton-seed meal are used. These 
feeds produce a grade of beef not far in- 
ferior to that produced by com. Naturally 
many feed-lots are found in the sugar beet 
districts, as along the coast near Los An- 
geles, where sugar producers engage in 
feeding as a means of utilizing surplus 
beet tops and pulp. Other feeding centers 
are in the San Joaquin and Imperial Val- 
leys in California and the Salt River Val- 
ley in Arizona, in proximity to the large 
alfalfa and cotton fields. The Salt River 
and Imperial Valleys are doubly im- 
portant as feeding districts, for the reason 
that they have both valley grass pastures 
and dry feeding lots, where cotton hulls, 
cotton-seed meal and alfalfa hay are used. 

Grass Range States 

California, Arizona and Nevada are pri- 
marily "grass-range" states, as distin- 
guished from the corn-feeding states of the 
great Middle West, such as Iowa, Kansas, 
Missouri and Nebraska. In these moun- 
tain states of the West where cattle are fed 
largely on natural pasture, many arc 
sold directly from the range to the packer. 
This means less expensive feeding in the 
long run, but a poorer grade of beef on 
the whole, and a longer period of turn- 
over. The corn feeder buys grown ani- 
mals, fattens them in a few months, and 
gets his money. The ranger raises his 
beef from calves, runs them out over the 
mountains while growing, and sells at the 
end of from 3 to 5 years. 

The range method of raising stock in- 
volves the uncertainty of climatic condi- 
tions. In extremely severe winters, for 
instance, cattle on the open range will die 
in large numbers, and in summer drouths 
the death rate will be equally high from 
lack of feed and water. The winter of 
1920 saw an average for the United States 

of 18.4 deaths from exposure per 1000 
cattle. For the comparatively mild winter 
of 1921 the average dropped to 9.3 deaths 
per 1000 head for the entire country. 
Arizona, however, reported more losses 
from exposure in 1921 than for any of the 
past 10 years, the estimate being 70 per 
1000, compared with 10 per 1000 in Cal- 
ifornia and 16 per 1000 for Nevada. 

A comparison of figures for the different 
cattle raising states indicates that Arizona 
is particularly unfortunate in losses from 
disease and exposure, while California and 
Nevada are at about the average. The 
most fortunate states are those of the Mid- 
dle West, which provide shelter for their 
animals and which do not have to depend 
upon the local weather conditions for 
feed. Arizona also suffers heavily from 
drouth, as it has done this year. Pasturage 
on July 1, 1921, was reported by the 
United States Department of Agriculture 
to be only 50% normal in that state, as 
compared with 86% in California and 
101 7o in Nevada. 

Though the western ranges are of low 
carrying capacity, requiring from 15 to 40 
acres of pasture per animal, depending up- 
on the degree of rainfall, the much great- 
er area of land available for use at low 
cost makes up for the small production 
per acre. California, Arizona and Nevada 
are fortunate in possessing large tracts of 
national forest reserve pastures, upon 
which stockmen are permitted by the gov- 
ernment to graze their cattle at a compara- 
tively small rental, usually a little over 
SI. 00 per head a year. The acreage in Na- 
tional Forest Reserve in these states, with 
estimated grazing capacity and charges per 
head of cattle, is shown by the following 
table for 1919: 


P«T hMd 


AcTM ia Number of 

SUU Foremt RcMinre Cattle Cntc4 

Arizona 11,154,923 343,425 

California 18,814,659 230,350 

Nevada 4.971335 87,735 

Total 34,940,917 661^10 

Cost of Production 

The cost of raising beef cattle varies 
with the cost of feed, interest rates on cat- 
tle paper, and the price of labor. The 
percentage of total cost represented by 
each one of these factors is approximately 


as follows, under typical conditions in the 
Southwest : 

Feed 55-70% 

Interest 25-15% 

Labor 10- 5% 

The feed factor is subject to the widest 
variations, due both to the continual fluc- 
tuation of prices of hay and pasture, and 
the varying climatic conditions which 
make the amount of feed an uncertain ele- 
ment. The cost of feed is therefore not 
only the largest factor in production cost, 
but it is a variable which never can be de- 
termined by the stockmen beforehand. 
Consequently he must take long chances. 
In years of heavy rainfall and favorable 
climatic conditions, he may be able to fat- 
ten his cattle on comparatively cheap 
range grass, and make huge profits. In a 
season of drouth or severe blizzards he 
may lose 10% of his animals, and be put 
to the necessity of buying expensive hay 
to fatten or save those remaining. In 
such a case he would have to sell at a 
price below cost of production and his 
losses would be great. 

In the days of the vast areas of free 
ranges good profit could be realized on 
cattle. The only uncertain factors were 
the weather and the selling price of beef. 
The comparatively steady demand for 
meat insured a fairly stable price for cat- 
tle, and the large profits in good years 
more than covered losses during a bad win- 

Free pasture has rapidly become scarce, 
however, with the reclamation of govern- 
ment land for agricultural purposes, and 
with the ever-increasing competition of 
sheep raising, as an additional difficulty to 
be met. True, there are large areas of gov- 
ernment forest reserves in the West upon 
which cattle may be grazed at low cost, 
but the figures given above indicate that of 
1,229,000 cattle in the state of California 
in 1919 only 230,000, or 18.7%, were 
given grazing permits for that year. 

Other ordinary expenses of the cattle 
raiser have increased more rapidly than 
the selling price of beef. He must now 
pay higher rent, build fences, cultivate 
some of his land for the raising of hay, 
and pay more for his foremen and cow- 
boys. The problem of making a profit on 
beef under modern conditions hinges 

largely on the cost of hay or other feed, 
as has been stated. This is even more 
true in the Northwest, where hay must be 
fed during the months when snow is on 
the ground. Fortunately large irrigation 
projects have made possible the raising of 
large quantities of alfalfa hay in the val- 
leys of the Southwest. Alfalfa is a high- 
grade feed for fattening cattle and cheaper 
than corn. But even hay in the stack costs 
something (usually about $6.00 per ton), 
and the price soars with the same causes 
which force the stockmen to buy feed, 
namely, failure of rains. It has been esti- 
mated that in parts of the Southwest 30 
acres of pasture and one ton of hay are re- 
quired to keep one animal one year. Ob- 
viously, with cattle selling on the hoof at 
6c per pound and alfalfa hay at $6.00 per 
ton, each animal must increase in weight 
100 pounds a year to cover the cost of the 
hay alone. To cover the rental or interest 
on 30 acres of summer pasture, pro-rata of 
operating expenses, and original cost of 
the animal as a calf, it must put on an- 
other 100 or 150 pounds, making a total 
gain in weight of 200 to 250 pounds per 
year, which stock of good breed will just 
about do in this part of the country. In 
most parts of Southern California stock- 
men attempt to bring their cattle into beef 
condition without the use of hay except as 
a last resort. This requires unusually good 
pasture, supporting on an average one ani- 
mal for every nine or ten acres, and favor- 
able weather conditions. Ranges of such 
capacity are valued at about $20.00 per 
acre, and bring from $0.75 to $1.25 per 
acre rental. 

Methods of Computing Cost 

Conditions utider which cattle are raised 
in the Southwest are of course different in 
different localities. Arizona, for example, 
is largely a breeding ground, of large in- 
expensive ranges. Southern California, on 
the other hand, is primarily a fattening 
district of small individual herds, the own- 
ers preferring to purchase calves from 
Arizona and Nevada rather than to pro- 
duce them from their own stock. Plenty 
of good grass, alfalfa hay and available 
beet and cotton fields make this possible. 

Although it is impossible to give exact 
figures showing cost of cattle production, 



the following represent to a fair degree the 
average of expenses involved in a normal 
year in Southern California, with the pos- 
sible profit: 

The stockman leases a range of 9,000 
acres at 75c per acre, having a grazing 
capacity of 9 acres per animal. He stocks 
this with 1000 "weaners" brought in from 
Northern California, Arizona or Nevada 
at $20.00 per head. The annual loss of 
calves, due to disease and exposure is as- 
sumed to be 2%, a fair estimate for this 


1000 calves @ $20.00 $20,000.00 

Annual loss of calves due to exposure 

and disease 2% 400.00 

Interest @ 8% on $20,000 1,600.00 

Rent of 9000 acres @ 75c 6,750.00 

Labor and salt, $1 per animal 1,000.00 

Cost of raising 1000 calves to yearlings. .$29,750.00 

Cost each $29.75 

Probable selling price of yearling 30.00 

Margin, exclusive of owner's salary and 
equipment .25 

Obviously, the cost of running the calves 
on such a range for the first year is too 
high to allow of a profit. To make his 
cattle pay out the stock raiser must hold 
them another year or two, uptil increase 
in weight, and higher quality of beef, due 
to the addition of fat, will bring a higher 
price per pound than can be realized from 
yearlings. If he runs them through a 
second and third year, the expense and 
possible profit, under the same normal 
conditions, would be approximately as 


Cost of 1000 yearlings to date $29,750.00 

Annual loss due to exposure and 

disease, 2% 595.00 

Interest @ 8% on $29,750.00 2,380.00 

Rent of 9000 acres at ;5c 6,750.00 

Labor and salt, $1.00 per animal 1,000.00 

Cost of raising 1000 cattle at end of 

second year $40,475.00 

Cost each 40.48 

Probable selling price, 800 lbs. 
@ 6c 48.00 

Margin (18%) $7.52 



Cost of 1000 cattle to date $40,475.00 

Annual loss due to exposure and 

disease, 2% 809.50 

Interest @ 8% on $40,475.00 3,238.00 

Rent, 9000 acres @ 75c 6,750.00 

Labor and salt $1.00 per animal 1,000.00 

Cost of raising 1000 cattle at end of 

third year $52,272.50 

Cost each 52.27 

Probable selling price, 1050 lbs. 
@ 6c 63.00 

Margin (20%) $ 10.73 

If the owner is forced to hold the cat- 
tle a fourth year, as many are doing now, 
in the hope of higher prices, the margin 
of profit recedes rapidly, provided, of 
course, that there is no advance in the price 
of beef. This is because the animals do 
not take on sufficient additional weight dur- 
ing the fourth year to compensate for the 
increased cost. On the same basis and un- 
der the same conditions as assumed for the 
first three years, the figures at the end of 
the fourth year would show a cost of 
$65.25 per animal, against a probable sell- 
ing price of $66.00. Accordingly the 
margin of profit on "four-year-olds" un- 
der these conditions would be only 1%. 

Cattle are rarely held a fifth year, ex- 
cept for breeding purposes. From the 
figures above the reason is obvious: the 
cumulative cost of maintaining a beef 
steer over five years will in all probability 
be higher than the price he will bring at 
the end of that time. 

Varying Conditions 

The above figures showing cost of pro- 
duction should not be taken too literally. 
Conditions vary so widely in different lo- 
calities and in different years, that only 
sample sets of conditions can be offered. 
In the hypothetical case taken above the 
stock raiser did not own, but leased his 
land, and paid for every acre of it. In- 
terest at 8^( was allowed on the full value 
of his cattle. In few cases would a breeder 
actually be paying interest on full value, 
for the reason that he could not borrow 
to that extent. But if he borrows to the 
extent of only 75% on the value of his 
stock, the remaining 25% represents his 
own investment, and the above figures as- 
sume that he is to be allowed usual inter- 
est on personal funds involved. In some 
cases the stockman owns a few hundred 
acres, leases auxiliary pasture during a 



• • 

part of the year, and perhaps feeds hay or 
beet tops at another time. In Arizona 
and parts of California where ranges are 
contiguous to government forest reserves 
and the owner controls the water supply 
of his neighborhood, he is allowed graz- 
ing privileges in the forest range at a very 
low charge. As a second typical set of 
conditions in such a region, say in the vi- 
cinity of Flagstaff, Arizona, we might take 
a man who owns a range worth $5,000, 
utilizes a neighboring forest reserve dur- 
ing six months of the year at 50c per head, 
and feeds half a ton of hay per head in 
the winter. He stocks his range with 1000 
cows at $45.00 and 40 bulls at $100 per 
head, the bulls depreciating one-half of 
their value over a period of three years. 
His calf crop would be on the average 
70%, and his annual loss by disease and 
exposure 3%. It may be assumed that he 
could borrow one-half the value of his 
cows, $22,500.00, for stocking and inci- 
dental expenses. If the computation is 
carried out, it may be seen that the owner's 
actual cost per calf will be $12.50. If he 
can ship these cattle to California buyers 
at $15.00 per head net, obviously he can 
realize a profit of 25%. 


In the neighborhood of Los Angeles 
and in the Imperial and parts of the San 
Joaquin Valley, there are many so-called 
"feeders," who make a practice of buying 
full grown but unfattened steers and cows 
and finishing them off on hay, beet tops, 
or cottonseed before they are sold to the 
packer. The feeder, of course, gambles 
on the cost of feeding being less than the 
increase in price of cattle fed. He ex- 
pects not only to produce more weight, 
but so to fatten each animal that the qual- 
ity of meat will bring a higher price per 
pound, usually about 3c, than that paid 
for the cattle on the range. 

Whether or not the "feeder" makes 
money is dependent primarily on the cost 
of feed. Some animals are naturally poor 
and will eat 40 pounds of expensive hay 
per day and gain very little; other better 
breeds will put on up to 2 pounds a day 
with the same amount of feed. In recent 
years the cost of hay has been so great 
around Los Angeles that this type of feed- 
ing has given way to fattening on sugar 

beet tops, and cottonseed meal. Sugar 
beet growers and sugar mills engage in 
feeding principally as an outlet for other- 
wise valueless by-products, and, of course, 
make good profit. The business of feed- 
ing, however, unless connected with some 
such source of cheap supplies, is a highly 
speculative one. 

Importance of Breeds 

It has been shown that the profit to be 
made on cattle depends much upon the 
amount of weight that can be added to 
a steer by the expenditure of a given 
amount of time and money. In this con- 
nection the matter of breeds plays an im- 
portant part. It will be remembered 
that in the early days of cattle raising in 
the Far West, when land was free and 
other expenses comparatively low, most of 
the cattle of this region were "longhorns," 
which had migrated into Texas from Mex- 
ico. As the margin of profit between cost 
and selling price became narrower, it was 
realized that the longhorn ate too much 
for the amount of fat produced. Too large 
a percentage of the animal was horn, skin 
and bones. Since that time stock raisers 
of the country have given more and more 
attention to stocking their ranges with 
breeds of cattle which would take on fat 
readily and dress out a larger percentage 
of beef. Nowadays the stockman expects 
his cattle to dress from 55 to 60% good 
meat, whereas 45% was a high average 
with the old longhorns. In the Middle 
West, and even in the Northwest, results 
in breeding and cross-breeding have been 
carried to a degree of perfection which 
probably cannot be hoped for in the 
Southwest for many years, if ever. Much 
attention is being given to the matter, 
however, and among the cattle of Arizona 
and Southern California a large percent- 
age of Herefords and Durhams is already 
found, though the nearer the Mexican line 
is approached, the poorer, as a rule, the 
quality of stock becomes. The California 
Cattlemen's Association foresees that the 
success of the cattle industry in this state 
depends greatly upon the matter of devel- 
oping good breeds, and is bending every 
effort to that end. There is some disagree- 
ment as to breeds best suited to this part 
of the country, but the concensus of opin- 
ion among experienced stockmen is that 


■ ! 




Durham cattle ("Shorthorns") fatten into 
beef more quickly than others and are the 
best stock for valley ranges, while the 
hardier Herefords are better rustlers and 
will maintain themselves more satisfac- 
torily on mountain ranges. 

Abnormal Production Costs 

That the market price of beef cattle is 
now (August, 1921) far below the cost 
of production can be proved. On previous 
pages of this report, figures are given 
showing that under normal conditions, 
with the factors of expense at a certain 
level and with cattle selling f.o.b. ranch 
at 7c per pound, a fair margin of profit 
to the cattle raiser was possible, say 10%. 
The important factors were seen to be 
feed, labor and interest on cattle paper. 
The following figures will illustrate the 
degree to which these factors increased in 
cost from the pre-war period to the years 
1919 and 1920. It should be borne in 
mind that it was during these latter two 
years that cattle now ready for market 
were raised. p„^^„, 

Pra.war of 

„ . lerel WW-JO laereaM 

Feed, alfalfa hay $6.00 $12.00 100 

Crass pasture grazing 

fee per acre 75 1.25 66.6 

Feed-lot charges per 

day, beet sugar tops, 

per ton basis 15 .60 300 

cottonseed and hulls, 

per day 30 .55 83.3 

Labor, wages of herders 30.00 90.00 200 

Interest on cattle paper 8% 10% 25 

A method was given above, with quali- 
fications, for estimating the cost of carry- 
ing cattle through the second and third 
years of their raising, under normal con- 
ditions. Using the same process, and 
raising the expense items to the percentage 
of increase just shown, the cost of raising 
the three-year-old cattle now on the mar- 
ket would seem to have been approximate- 
ly $86.66 per head. The present market 
price for such animals is $63.00 (1050 
pounds at 6c per pound). Obviously the 
producer is now facing a loss of $23.66 
per head (27.3%). 

Before cattle can be produced at a profit 
again in this part of the country, one and 
probably both of the following changes 
must come about: (1) A decrease in the 
cost of production; and (2) A rise in 
the market price of beef. 

Some cost factors are already falling. 
Range rental has declined about 25%, feed 

yard charges 30%, and labor 35%. 
Alfalfa hay is back almost to normal. 
But interest rates still remain high, with 
money even harder to obtain. 

When the beef market will recover is a 
problem that all cattlemen are trying to 
solve. They believe that the low level just 
reached is unwarranted and cannot be 
maintained long. Consequently the ad- 
vices going out from the California Cattle- 
men's Association and other friends of the 
stockmen are to hold for better prices. 
Most of them are in need of funds for 
common living expenses, however, and 
must sell at any price. 

Market Hindrances 

Apparently the packers are selling 
dressed beef at only a legitimate profit 
above cost. The ratio between prices paid 
by them for cattle on the hoof and prices 
at which they sell dressed beef to the 
butchers, is only slightly higher than be- 
fore the war, and the difference may be 
accounted for by the enormous decline in 
the price of by-products, a source from 
which the packer ordinarily expects to 
cover overhead expenses. 

Producers and packers agree in the be- 
lief that retail butchers are doing much to 
delay recovery of the beef raising indus- 
try by exhorbitant charges for meat over 
the counter. Good meat is made to re- 
main an expensive luxury, and the masses 
will not buy it. Demand and consumption 
decrease and the market lags. 

A beef when slaughtered dresses out 
at about 50%. Therefore a 1000-pound 
steer would furnish 500 pounds of beef, 
for which the butcher would have to pay 
$67.50 at the present price (13Voc lb.). 

From the following table the maximum 

gross profit which may be realized from 

the sale of a beef carcass at present 

prices may be calculated: 

COST, 1 beef car- 
cass, 500 lbs. (^ 

13%c 167.50 

Porterhouse and 

club steaks 35 lbs. (n} 55c $19.25 

Sirloin steaks 40 " (fi] 43c 17.20 

Rib roasts 45 " @ 40c 18.00 

Round and chuck 

steaks and rump 

roasts 175 " @ 35c 61.25 

Boiling meat and 

miscel 205 " @ 8c 16.40 

Total 500 lbs. $132.10 

Gross profit (95.7*7r ) on cost price 64.60 

The retail prices given were obtained 
by personal inquiry of six representative 
butcher shops in various parts of Los 
Angeles. The scale of proportionate 
weights is that recognized by packers and 
published in Swift & Company's year book 
for 1920. 

It would appear from these figures that 
at current prices butchers in this vicinity 
can, with efficient cutting, make about 
$64.60 gross on each carcass. To arrive 
at net profits it is, of course, necessary 
to subtract operating expenses. For this 
purpose we may take the shop which sells 
one carcass per day. 

Investigation indicates that cutters are 
paid about $6.50 per day. One cutter can 
handle one carcass per day. Rent, ice and 
delivery expenses may run as high as 
$11.00 per day. If all of these expenses 
are charged to beef sales alone (beef con- 
stitutes about 38% of all meat sold) there 
would be a total of $17.50 per day to be 
deducted from the gross profit of $64.60. 

50^ ^y* '}^ ^'^7 'y '^|> J f 

For the shop handling one carcass per day, 
therefore, the net profit would be $47.10 
per day or per carcass, which is 35.7% 
net if figured on the selling price of the 
carcass, or 68.7% if calculated on cost 
price. Average retail meat shops handle 
from four to five carcasses per week. 
Large dealers handle up to five and ten 
per day. 

While these profits seem unjustifiably 
high, retail meat dealers contend that in 
actual practice their net profits on all 
meat sales are considerably less than they 
appear in theory. It is said that at pres- 
ent pork sales often show a net loss, which 
must be counterbalanced by additional 
profits on beef. Butchers claim also that 
due to the insistence of housewives on 
small, choice cuts, considerable waste is 
experienced in trimming. They assert that 
they experience considerable loss from 
shrinkage due to the necessity of keeping 
meal in storage because there is not a uni- 
form demand for all cuts from a given 

SvpartiMat of Rassarcb A Sanric* Sacurit/ Tnict ft Sarii^t Bank 

Comparative Trends of Retail Meat Prices, Wholesale Meat Prices and Range Cattle Prices, 1914-1921 

(Scale is arranged logarithmically to reflect relative changes) 







carcass. It is also contended that few 
cutters are sufficiently skillful to cut out 
of a carcass the percentage of good meat 
shown to be possible by Swift & Com- 
pany's scale, indicated above. 

Whatever the facts, examination of the 
records of R. G. Dun & Co. reveals that 
there have been no failures among Los 
Angeles meat dealers in the past year. 

Marketing and Packing 

The marketing of beef in the Southwest 
is done either by local butchers, or 
through packing-houses at the main cen- 
ters of population. In California con- 
sumption of beef so nearly equals pro- 
duction that the packer's task is largely 
one of local distribution. 

Although there are stockyards for the 
assembling and distribution of cattle at 
Denver, Colo., and at Portland and 
Seattle in the Northwest, they are un- 
known in the Southwest. Cattle ap- 
parently ready for market are shipped 
to the meat centers and sold directly 
to packers for slaughtering, or if not 
in killing condition on arrival, are sold 
to dry-lot feeders in the vicinity, who 
fatten the animals on alfalfa hay or beet 
tops for a few months, and then turn them 
over to the packers. 

It is claimed by many that the mar- 
keting of beef in this region is handi- 
capped by the absence of a union stock- 
yards with improved packing and canning 
equipment, at some such center as Los An- 
geles. There is no central point at pres- 
ent to which cattle may be shipped for 
segregation into "feeders" and "market 
fat." Consequently it is contended that 
stockmen are much at the mercy of the 
buyers, who are usually agents of the 
packers. In the absence of a central cat- 
tle market, these men go out to the ranges 
and drive their bargains with the individ- 
ual raisers, who are often ignorant of 
prices and general market conditions. The 
buyers will select the best of the herd and 
leave the ranger with a poor grade of cat- 
tle on hand. Many of these rejected ani- 
mals will be shipped down to feed-lots 
in the valleys and at the packing centers. 
Among them will be old cows and runty 
steers which could not be fattened by 
even the most expensive dry- lot feeding. 
If there existed stockyards for proper seg- 

regation, with well-equipped packing es- 
tablishments close at hand, these poorer 
animals could be culled out and slaughtered 
inunediately as "canners." This would 
prevent the waste of much good feed. 

It is thought by some that a union 
stockyards would do much to break the 
power of large buyers who are now able 
to "bear" prices to a certain extent through 
the inability of shippers to find a competi- 
tive market for their offerings. 

On the other hand some of the largest 
cattlemen do not favor the establishment 
of stockyards, claiming that through them 
the packers would secure even a stronger 
hold on the market. One of our largest 
producers in the South, Mr. Fred Bixby of 
Long Beach, is at present opposing a plan 
of the Los Angeles Chamber of Commerce 
to have a union stockyards established at 
this center. Mr. Bixby, an ex-president 
of the California Cattlemen's Association, 
contends that such stockyards would fall 
into the control of the large packers and 
become a means of dictating prices to the 
producer. With the beef crop of the state 
regularly gathered into stockyards, Mr. 
Bixby declares, the supply would be deter- 
mined easily at the beginning of each 
market day, and whenever a surplus be- 
came apparent, interleagued packers could 
force owners to accept whatever they 
pleased to offer. Freight charges would 
make impossible the shipment of stock to 
other markets and high feed charges at the 
stockyards would make it unprofitable to 
hold for better prices. Mr. Bixby also 
contends that there is no market for Cal- 
ifornia beef other than for local consump- 
tion, and therefore no need of concentrat- 
ing cattle for shipment out of the state. 

Though cattle are slaughtered and sold 
by butchers in even the smallest towns, the 
chief beef marketing centers of this region, 
south of San Francisco and Ogden, and 
west of Denver, are Los Angeles and 
Phoenix. Los Angeles handles about five 
times as many cattle annually as Phoenix, 
and slightly outranks her nearest rival in 
the West, San Francisco. The demands of 
the San Francisco market are augmented 
by the regular purchases of the naval 
supply base at Mare Island, amounting to 
some 20,000 head per annum. There are 
other minor packing centers in the San 

Joaquin Valley and along the coast of 
Soutfiern California, but these are rela- 
tively unimportant except for supplying 
local demands. 

The following figures, most of them 
obtained from reliable sources, are be- 
lieved to be fairly accurate estimates of 
cattle slaughtered in cities of the Southwest, 
with a comparative figure for San Fran- 

Skufhter of Cattle 
and CaWet 

Lo8 Angeles, including Vernon 154,056 head 

Phoenix, Ariz. 30,318 

Pomona 6,705 

San Diego 10,000 

Anaheim 6,800 

Santa Barbara 3,000 

Fresno 1,950 

San Francisco 126,321 

The slaughter for the state of California 
during 1920 was 495,167 cattle and 
86,044 calves, or a total of 581,211 head. 

Packing at Los Angeles is largely in the 
hands of six large concerns, two of which 
(Cudahy & Company and Wilson & Com- 
pany) are local establishments of members 
of the so-called "Big Five" at Chicago. 
The large independent companies are the 
Hauser Packing Company, the California 
Dressed Beef Company, the Standard 
Packing Company and the New Market 

The packing-houses of Los Angeles 
draw cattle from the entire southern part 
of the state, as well as from the coast 
ranges as far north as Monterey County, 
and from the San Joaquin Valley south of 
Stockton. In the more northerly districts 
Los Angeles buyers come into competition 
with buyers from San Francisco, either 
overbidding or underbidding each other 
according to price quotations at their re- 
spective bases. Because of the slight sur- 
plus shipped East every year (averaging 
about 25,000 head), Los Angeles buyers, 
with the shorter rail distance to the Middle 
West packing centers of St. Joseph, Kansas 
City and St. Louis, ordinarily have the ad- 

Besides the slaughter of cattle produced 
in the southern part of California, the 
packers of Los Angeles kill large supplies 
drawn from Arizona, Utah, Idaho, Texas 
and Nevada. Of 94,665 head shipped to 

California abattoirs from these and other 
states last winter, Los Angeles took 48,575, 
or 51%, while 34,754, or 37%, went to 
San Francisco. It should be stated that 
the total for last year was considerably 
above the seasonal average. During Feb- 
ruary, 1921, there occurred the unusual 
phenomenon of a higher price for cattle 
on the Pacific Coast than at Chicago, with 
resulting heavy importations. 


The outbreak of the war in 1914 saw 
the almost immediate rise in beef prices 
in this country. The uptrend was at first 
gradual, but became increasingly steeper. 
To meet the enormous demand of the 
European countries for beef, and with the 
supplies of India, Australia and Russia 
cut off, the United States, Argentina and 
Canada were called upon greatly to in- 
crease production. The producers of 
America, stimulated by propaganda of 
the Food Administration, and probably 
even as much by soaring prices, rose to 
meet the emergency. Our exports of beef 
increased tremendously. A shortage was 
created in this country and prices ad- 
vanced rapidly, until they reached a peak 
in July, 1918, of lie per pound, 83% 
above the pre-war level of 6c. The end 
of the war saw some hesitation in the 
market, with prices holding fairly even at 
10c. But the expected deflation was not 
yet to come. Export demands continued 
and during the period of extravagance in 
the country the public insisted upon plenty 
of everything, at any cost. 

Prices advanced again until they reached 
their highest peak of 12c in March, 1920, 
100% above normal. Such prices were 
enjoyed by the stockmen only for a short 
time, however, when the long-feared but 
unprovided-for deflation began in April. 
From then until within the past few 
weeks the curve has been steadilv down- 
ward, reaching the pre-war level in June, 
1921, and dropping below it in July. 

At this date, August 1 5th, a slight recov- 
ery in beef prices is noticeable at Chicago, 
though the market at Los Angeles is as 
yet unchanged. 

Various factors have combined to force 
the rapid decline of beef prices. First 
came a reaction by the public, consequent 



to the era of heedless extravagance in this 
country. People began to buy smaller cuts 
of meat and fewer of them. Exports fell 
away, declining from 6,023,338 pounds of 
fresh beef exported from the United States 
in March, 1920, to 508,230 pounds exported 
in March, 1921. The accumulations of 
overproduction were thrown upon the 
market, the speculative element collapsed, 
and the ever-steadying by-product market 
disappeared. Cattle loan associations 
which had advanced large amounts of 
money to cattlemen demanded liquidation 
and settlement, and more cattle were 
thrown on to a badly overflooded market, 
until the price was forced down to below 
cost of production. 

Figures showing the relative decrease 
in farm prices of beef cattle in each of 
the important cattle states of the country, 
published by the United States Depart- 
ment of Agriculture, are of interest in de- 
termining which of the cattle states have 
suffered the most radical price recessions. 
An examination of these figures would 
show that the greatest declines for the pe- 
riod ending May were experienced in Illi- 
nois and Kansas, where the farm value of 
cattle dropped from about $10.00 to $6.20 
per 100 pounds, or nearly 40%. The aver- 
age decline for the country as a whole was 
33%. In California the recession was a 
little under the average, 32.3%, while 
South Dakota and Arizona seem to have 
been the most fortunate of the states in 
the matter of prices, suffering declines of 
only 20.6% and 22.2%, respectively, up 
to May of this year. 

Dedine of By-Product Prices 

It has been stated that one of the causes 
of decline in cattle prices has been the 
drop in by-product values. This has been 
especially true in the case of hides, and 
it goes a long way in explaining why the 
packer was not able to pay more for cat- 
tle on the hoof this spring, with his sell- 
ing price of dressed beef at 15%c, than he 
paid in 1913, with dressed beef at 12%c. 
It should be understood that the packer 
ordinarily depends upon the value of by- 
products to pay more than the cost of 
dressing. The normal cost of slaughtering 
and dressing a beef is about 10% of its 
value. Upon an $80.00 steer it would be 

therefore about $8.00. Hie usual value 
of by-products (hides, oflFal and fat) 
from such an animal is about $15.00. Ac- 
cordingly in ordinary times when paying 
S80.00 for a steer, the packer deducts 
$7.00 as by-product values over and above 
cost of slaughtering, and reckons $73.00 as 
his cost price of the beef dressed. At pres- 
ent, due to the low level of by-products, 
he is unable to deduct anything, but must 
add about $2.00 for cost of dressing, over 
and above the amount he can realize from 
the sale of by-products. 

Hides, which are the most valuable by- 
products from cattle, brought about 15c 
per pound before the war. At the end of 
1919 the price went up to over 30c per 
pound (green hides, California steers), 
and during the spring of 1921 declined to 
about 5c per pound. Other less im- 
portant by-products declined in value as 
well. The price of edible tallow dropped 
467c, from 1234c per pound in 1920 to 
6%c in 1921. Oleo stearine declined 
from 1314c to 934c (25%), fertilizer 
(dried blood) from $8.20 to $2.55 (89%) 
per unit, and tankage from $7.12^^ to 
$2,371/2 (67%), during the same period. 

Obviously, with the decline of by-prod- 
uct values, the spread between packers* 
buying prices and selling prices became 
greater. Through the courtesy of two of 
the largest packing establishments in Los 
Angeles, it has been possible to gather 
figures showing the changing relation be- 
tween the cost of steers to the packer and 
his selling price, during the past nine 
years. The following selections from the 
table are typical: 









Ridee oa 
Spread Same Date 




1913 7%c 

1917 8H 

1919 (Sept.) 11% 
1921 (May) 7% 

It will be seen that in 1913 when pack- 
ers were paying 7l^c per pound for cat- 
tle delivered, and hides were at 15c, they 
were selling dressed beef at 12%c. This 
allowed a margin of 70% to cover wastage 
and profit. At the end of 1919, when 
hides reached their highest point, beef 
which cost the packer ll%c on the hoof, 
was sold at 17%c when dressed, a mar- 
gin of only 51%. Examining the figures 
for recent months, it appears that in May, 

1921, when the cost of cattle to the packer 
was 7^c per pound (the same as in 1913), 
and hides were below 8c, the selling price 
of dressed beef for the same date was 
15%c. The margin in this case was 110%, 
compared with one of 70% in 1913. 
Plainly the price of hides at any given time 
has a direct effect upon the relation be- 
tween cattle and dressed meat prices. 

That the difference between packers' 
buying and selling prices varies inversely 
with the price of hides, is clearly shown 
by the accompanying Chart No. II. As 
the price of hides gradually declined from 
1919, the trend of difference between cost 
and selling price was upward. Soon after 
the hide market reached its lowest point 
in 1921, that difference reached its peak. 
Despite the influence of receding by- 
product values, the trend of wholesale 
beef prices has followed closely the price 
of cattle on the hoof. Wholesale beef 
prices went up with cattle prices in 1918, 

and every decline in cattle prices since has 
been reflected promptly in wholesale quo- 
tations. The fact that the percentage of 
decline during the last few months has 
been less is accounted for by the low value 
of by-products. Chart No. I, which is 
sympathy which has existed between range 
presented on Page 15, illustrates the 
caltle prices and packers' selling prices, 
respectively, and seems to corroborate the 
contention of packers that they are not re- 
sponsible for the present high prices of 

Butchers in Los Angeles make the as- 
sertion that certain cuts of beef can be 
had at their shops more cheaply today 
than they could be purchased before the 
war. This is true of the cheaper cuts, such 
as boiling meat. An examination of pe- 
riodical price quotations advertised by the 
butchers during the war period and down 
to date, reveals the fact that whenever the 
good cuts of beef went up in price, the 









2 1 























































^ 1 







Departaant of Reaaarch * SerTic* 


RT K. 

>. II 

.Security Truat k 

S«TlBsa Bftak. 

(A) Percentage of Difference Between Cattle Prices and Wholesale Beef Prices 
(B) Value of Hides During the Same Period 


cheaper cuts went down. The two curves 
representing the respective price trends 
form a somewhat symmetrical figure. The 
high points in the curve representing 
steaks and roasts are opposite the low 
points in the curves depicting pot roast 
and boiling meat prices. The reason is 
obvious: people developed extravagant 
teistes during the war and the aftermath 
period, and many still demand the choice 
cuts. The modern housewife does not find 
time to cook roasts and boiled meats, 
though these in fact have a higher food 
value than do steaks and chops. Seventy- 
five per cent of a beef carcass, however, 
is of these cheaper cuts of meat. They 
must be disposed of in some manner, and 
the butcher reduces their selling price in 
proportion to the rise in demand (and 
price) of the more popular cuts. The re- 
sult is that at present boiling meat and 
pot roasts can be had at from 5 to 10c 
per pound, while porterhouse and club 
steaks average about 65c. 

On the whole, retail prices are still 32% 
above normal, though they have declined 
some 37% since the peak of July, 1920. 

Meanwhile range cattle prices declined 
50%, to a point below normal, and whole- 
sale prices declined 34%, to a point only 
6% above that of 1914, in spite of the low 
value of by-products. Clearly retail meat 
prices have not been keeping pace with cat- 
tle and wholesale prices in the long-awaited 
recession. It is true, however, that retail 
prices reached their highest point two to 
three months later than cattlemen began 
to receive their top prices, and this may 
be the basis of a hopeful prediction that 
retail prices are merely delaying the drop 

Financing the Cattle Industry 

The cattle industry is financed both by 
banks, which make loans directly to stock 
raisers, and by privately-operated loan as- 
sociations, which purchase and endorse 
cattle paper for rediscount through the 
banks. A cattle loan is secured by the 
promissory note of the borrower, together 
with a chattel mortgage on his livestock 
and equipment, and sometimes by a mort- 
gage on his real estate. 











— -• <■ 


























ment o 

f Resei 

arch & 




rliy T 

rust ft 


igt Baa 



CHART No. Ill 
Showing (A) Seasonal Price Variations in Cattle Prices for the Ten-Year Average, 1911-1920 

(B) Price Variations for the Year 1920 


In the stock raising regions of the 
Middle West, financing through loan asso- 
ciations is undertaken extensively by large 
packing companies, who are interested in 
keeping the industry in a heallhy condition 
to the end that there may be a steady 
flow of livestock to the packing-houses. In 
Southern California and Western Arizona 
cattle loan associations have only recently 
appeared. Cattlemen have heretofore re- 
lied almost entirely upon bank loans and 
upon money advanced by private individ- 
uals. In the southeast region of Arizona, 
where cattle raising is most intense in that 
state, stockmen have been financed by loan 
associations operating from the Middle 
West packing centers. Most of these com- 
panies are controlled by packing interests. 

In the past few years a comparatively 
small number of cattle loan associations 
have begun business in Southern Califor- 
nia, with offices at Los Angeles. Most of 
them are closely allied with packing inter- 
ests. Only one of the number has thus 
far handled a considerable volume of busi- 

These cattle loan associations have come 
into existence mainly on account of the 
difficulties experienced by cattlemen in se- 
curing bank loans. Banks have been 
proverbially cautious in accepting cattle 
paper. Livestock security is necessarily of 
changing value, inspection is difficult and 
expensive, renewals are usually requested, 
and enterprises too often of a speculative 

Interest of Packers in Loan 

Meat-packing companies, however, are 
vitally interested in the maintenance of 
steady production of cattle on the ranges 
and the fattening of beef by feed yard op- 
erators. They have, therefore, encouraged 
and assisted the incorporation of cattle 
loan associations in stock raising centers, 
for the better financing of the industry. 
These associations on the whole develop 
highly efficient organizations. The officers 
ordinarily include practical cattlemen and 
experienced livestock buyers, who are 
familiar with every angle of die industry. 
Stockmen actively engaged in raising cat- 
tle are made managing directors, inspectors 
are appointed in the range districts, and 

accurate records of pasturage and weather 
conditions, quality of breeds, and preva- 
lence of disease are collected, with other in- 
formation of interest to the business. 
Through such organizations cattle loan as- 
sociations are equipped to render valuable 
service both to cattlemen and to the com- 
munity which is interested in the sound 
development of the livestock industry. 

One danger in extensive financing by 
cattle loan associations, however, lies in 
the tendency on the part of some of these 
institutions to advance money too liberally, 
sometimes on full value of cattle security, 
in order to "boost" the business. Such 
practices result in disaster to borrowers 
and cause instability in the market when 
risky loans are called in before stock can 
be profitably disposed of. Unhappy re- 
sults of this kind are being experienced at 
present, because cattlemen are forced to 
liquidate in a depressed market heavy bor- 
rowings made during the period of in- 
flated values. Another element of danger 
in loan association finance is said to exist 
in the opportunity which is aff"orded the 
packers, through their control of such com- 
panies, to keep borrowing stockmen in 
their power. The cattle industry is ordi- 
narily operated on a large scale. The 
cattleman must make heavy borrowings 
for the purchase of stock and the payment 
of running expenses. If banks are pre- 
vented by legal restrictions or by cautious 
boards of directors from advancing the re- 
quired funds, the stock raiser is dependent 
upon the loan associations, and conse- 
quently upon the packers who financially 
underwrite these associations. If he bor- 
rows funds for the purchase of stock or 
feed, and is caught at maturity of the 
loan with a dull market, it is to his interest 
to hold for higher prices. The market 
may be below his cost of production, in 
which case liquidation would mean an 
actual loss. In such a case the packer 
controlling the association which advanced 
the loan, could demand immediate pay- 
ment, and perhaps foreclose on the mort- 
gage, either bidding in the cattle at a low 
price or forcing their sale on a depressed 

It is believed, however, that such prac- 
tices on the part of packers are exceed- 
ingly rare. Accusations come mostly from 
disgruntled breeders or feeders who, 


through mismanagement or speculation, 
have not been able either to meet their ob- 
ligations within a reasonable length of 
lime or to show prospects of ever paying 
out. Packers are more interested in main- 
taining a constant and stable market than 
in realizing occasional profits by forced 
sales, and it is to be doubted that they 
often use their financial control over stock- 
men to force down cattle prices. 

How Loans are Made 

The method of making loans to cattle- 
men by banks and loan associations is 
J , fairly uniform. The prospective borrower 
^ files a written application, accompanied 
by a sworn statement of his financial con- 
dition. The statement includes a descrip- 
tion of the stock which he proposes to of- 
fer as collateral, his facilities for taking 
care of them, real estate owned or leased, 
and outstanding mortgages or obligations. 
The bank or loan association checks up on 
this statement by private inquiries, and 
county records are examined to determine 
whether the applicant's statements are cor- 
rect as to outstanding obligations. A 
cattle inspector is then sent out to count 
and examine the borrower's stock. He re- 
ports as to quality of breeds, condition 
of pastures, facilities for taking care of the 
stock, and the general reputation and 
ability of the applicant. If, upon receipt 
of the inspector's report, the loan is 
granted, the borrower is required to sign a 
promissory note for the amount advanced, 
and to execute a chattel mortgage on the 
stock and its increase, feed on hand, and 
sometimes on equipment and real estate. 
Although banks and the more conservative 
loan associations refuse to loan more than 
from 50% to 75% of the value of stock 
given as collateral, less careful associa- 
tions consider that an ample margin of 
safety lies in the probable increase of the 
herds, i.e., in birth of calves and increase 
in weight of steers. 

I Cattle loans run ordinarily for six 
/months. This term is adequate for the 
I "feeder," who buys full-grown steers from 
the range and fattens them for beef in 
three or four months. His period of turn- 
over is short. The stock breeder, however, 
usually requires a longer period for liqui- 
dation, and consequently must secure re- 


newals, (wherein lies the chief defect in 
the present system of financing). Renew- 
als require new paper and new inspection 
of stock, adding further expense to the 
negotiation, and the semi-annual payment 
of interest keeps the stock raiser in a con- 
stant state of unrest, making it difficult 
for him to delay the sale of stock until 
the best prices are obtainable. Yet it is 
through the short-term feature of cattle pa- 
per that banks and cattle loan associations 
are given their best means of protection. 
They may refuse to renew loans, after six 
months, to borrowers who do not show evi- 
dence of being able to meet their obliga- 
tions. As a matter of practice, however, it 
is usually understood that stock breeders 
may secure a reasonable number of renew- 
als of their notes, since it is, of course, to 
the interest of the lender to carry them un- 
til a time when their cattle may be dis- 
posed of at a profit and all obligations met 
in full. Such renewals should be granted 
with caution, however, and only after 
careful inspection has been made of cattle 
securing the loan, condition of the pasture, 
and a forecast of beef prices. Failure to 
check up on borrowers in this way, and a 
loo liberal policy in accepting cattle paper 
by some of the banks and loan associations 
last year, has placed them in such a po- 
sition that they must either repeatedly re- 
new inadequately secured loans, until cat- 
tle prices shall have recovered, or foreclose 
and take heavy losses. 

The gross profits derived by cattle loan 
companies is measured by the difference 
between the interest collected from bor- 
rowers and the discount rate of the bank 
through which the paper is liquidated. 
The average cost of making cattle loans, 
including inspection, is estimated at 1% 
of the amount of the loan. The prevailing 
interest rate imposed by cattle loan asso- 
ciations at the present time is 10%, some- 
times with additional charges amounting 
to from 1%) to 2%, "to cover cost of in- 
spection." The rates at which banks are 
now discounting cattle paper range from 
7y2% to 814%. The cattle loan asso- 
ciations therefore have a possibility of 
making a gross profit of from 1%% to 
414% on each loan. The usual profit is 
said to be 2%. 

Cattle paper is self-liquidating. It is 
short-term paper and when endorsed by re* 



liable cattle loan associations becomes 
good "two-name" paper. It should there- 
fore enjoy a high degree of liquidity. 
Loan associations dealing in cattle paper 
may handle large amounts, running into 
the millions of dollars annually, with 
comparatively small working capital. 
When these associations grant loans which 
are too large for discount through any 
one bank, such loans are parcelled out 
among several banks, much after the man- 
ner of the Lloyd insurance risks. Banks 
accepting parts of individual loans, how- 
ever, must do so with extraordinary care, 
since the division of the cattleman's note 
and mortgage into parts affords opportu- 
nity for sharp practices. 

When Money is Needed 

The peaks of activity in cattle loan dis- 
counts are reached in the spring and fall 
seasons of the year. Cattlemen usually 
need money for the purchase of new 
stock for the ranches in April and May. 
Holders of leased ranges ordinarily pay 
their rent in the fall. This is also the 
usual time for settlement of ordinary bills 
for groceries, feed and supplies. 

Figures showing the volume of cattle 
paper dealt in monthly during 1920 and 
1921 by loan associations in this region 
indicate that last year such associations 
advanced to cattlemen approximately 
$5,000,000, the largest advances having 
been made in May and November. For 
the first eight months of 1921, loans from 
the same sources have amounted to about 
$2,000,000, the largest aggregate amount 
for any one month occurring in April. 
The value of cattle paper now outstand- 
ing on the books of local cattle loan asso- 
ciations is thought to be less than 

Reports from the Federal Reserve Bank 
of the Twelfth District indicate that 
the volume of live stock paper redis- 
counted through banks so far this year has 
been about $24,000,000, ranging between 
$3,500,000 and $4,500,000 per month. The 
largest advances were made in April and 
June. The total value of live stock paper 
held by the Federal Reserve Bank on the 
last day of June, 1921 (the latest date 
for which figures are available) was 
$14,633,000. The figures published by the 
Federal Reserve Banks include all classes 

of livestock paper. Separate records of 
cattle paper are not kept, but cattle loans 
undoubtedly constitute the larger part of 
the sum of all livestock loans in this dis- 

Shortage of Cattle 

Much has been said recently of the 
shortage of beef cattle in this country, and 
official surveys indicate that there are in 
fact less cattle per capita now than there 
were in 1920, though the shortage is less 
marked in California and Nevada than in 
other stales. The actual shortage in num- 
bers for individual districts is estimated 
by livestock associations approximately as 

fo^OWS: c.ttto Shoruge. 1921 

•• Compared with 1920 

Northern States 0% 

Southern States 50% 

Central States 25% 

California 10% 

Nevada 0% 

Census figures for California show the 
number of beef cattle in the state to have 
been 1,229,086 in January, 1920. Unfor- 
tunately it is difficult to compare these fig- 
ures with those of the 1910 census, since 
the count for the latter year was taken 
as of April 15, three and one-half months 
later in the year than that for 1920. The 
1910 count, therefore, included a large 
number of spring calves which would not 
have been taken in the 1920 census. On 
the other hand, the figures for 1910 were, 
of course, reduced by the number of cattle 
slaughtered between January 1 and April 

Probably the best comparable records 
available are those of the Bureau of Crop 
Estimates, United Stales Department of 
Agriculture, which publishes cattle census 
figures periodically. A study of these 
records indicates that while there is an 
actual shortage of cattle in the United 
States as a whole, it is not as great as live- 
stock publications make it out to be. 

Perhaps the best way of determining 
whether or not the cattle supply is below 
normal, is on a per capita basis. Figures 
for Arizona, Nevada, and the average for 
the United States as a whole may be com- 
puted on this basis as follows: 


Per 1000 Per lOOO crease 

Cattle Inhabl- Cattle Inhabi- or In- 

^ ... 191* tants 1920 tanu crease 

Califotnia 1,339,000 563 1.634,000 477 —15% 

Arizona 796.000 389 1.000,000 299 —23% 

N'-vaHa 432,000 527 535.000 691 +S1% 

United State*.. 41.178.434 446 44,75O,O0Q 433 -5.2% 



More significant than the slight per cap- 
ita decrease in the total number of beef 
cattle in the country, however, is the com- 
paratively large decrease in the number 
of cows, i.e., reproductive stock. The 
census shows that there were 100,000 less 
cows in California in 1920 than in 1910, 
a decrease of 33%, when there should 
have been an increase of 44%, to keep 
pace with the population. The reason for 
this is found in the fact that stockmen, 
hard pressed for money, and unable to 
secure loans to carry them through, have 
been selling cows as well as steers for 
beef. The California Cattlemen's Associa- 
tion estimates that in California the nor- 
mal ratio of cows to cattle slaughtered is 
25%, while this year it has been 38%, 
and predicts a further shortage of breed- 
ing stock next year. 

Consumption of beef in this state is ap- 
proximately 500,000 head per year. At 
the time of the census (January, 1920), 
there were 441,000 cows of calf-bearing 
age (2 years and over) available. On the 
basis of a 70% calf production, about 
normal for the state, these would yield 
308,000 calves per year, about 25% of 
which should be kept for breeding pur- 
poses, leaving 231,000 calves to grow up 
for beef. Of the 441,000 breeding cows 
now on farms and ranges, one-fifth, or 
88,000, would be available for slaughter 
each year, since a cow is not kept for calf 
bearing after it is 5 years of age. There 
are also about 800,000 dairy cattle in the 
state. These will supply about 10% of 
our beef, or 200,000 head, this year. 

From the three sources of supply, 
therefore, we would obtain 231,000, 
88,000 and 200,000 head, respectively, or 
a total of 519,000, against a consumption 
of 500,000. The apparent margin of 
19,000 is just about sufficient to cover the 
regular annual 4% loss from disease and 


exposure. Obviously, therefore, if there 
is any considerable decrease in the number 
of breeding cows which were available 
last year, the coming supply of beef in this 
slate will be less than that of previous 

Consumption Below Production 

Compensating for the decreased pro- 
duction of beef cattle in the country dur- 
ing the past year, and probably a cause 
of any such shortage, is the decreased con- 
sumption of beef. The per capita con- 
sumption of beef in 1919 was 60 pounds. 
In 1920 it had dropped to 56.4 pounds, a 
decline in one year of 6%. More startling 
than these are the figures for the period 
from 1910 to 1920. During this time 
beef consumption per person in the United 
States decreased from 78 pounds to 56.4 
pounds, a decline of 27%. Decrease in 
consumption has been, therefore, much 
greater than decrease in production, and 
this without taking into consideration the 
almost complete cessation of beef exports. 

From these facts it would appear that 
although there is a slight numerical short- 
age of cattle this year, with prospects of 
an even smaller number on the ranges 
next year as a result of present slaughter- 
ing of breeding stock, the situation cannot 
be regarded as alarming from a food stand- 
point. There is no danger of a meat 
famine. When the supply of beef be- 
comes scarce, relative prices will cause 
people to eat less beef and more pork 
and mutton, or even substitutes for meat. 
As measured by demand there is no short- 
age of supply at the present time. Either 
demand must be brought back to normal 
by an adjustment of retail meat prices to 
popular buying power, or the supply even 
further reduced, before the economic law 
can operate to raise cattle prices. 

^ I « 


An Offer of Service 

The Department of Research and Service of the Security 
Trust & Savings Bank is prepared to furnish complete and 
accurate information regarding any line of business, whether 
commercial, agricultural or industrial, of Los Angeles and 
Southern California. 

The services of this Department are offered, free of 
charge, to anyone desiring such information, and the Depart- 
ment will make detailed surveys and reports for the benefit 
of those interested. 

The work of the Department is carried on by men 
specially trained in research, and familiar with the business 
and financial conditions of this section. 

A well-equipped library is maintained by the Department 
to facilitate its services. 







More significant than the slight per cap- 
ita decrease in the total number of beef 
cattle in the country, however, is the com- 
paratively large decrease in the number 
of cows, i.e., reproductive stock. The 
census shows that there were 100,000 less 
cows in California in 1920 than in 1910, 
a decrease of 33%, when there should 
have been an increase of 44%, to keep 
pace with the population. The reason for 
this is found in the fact that stockmen, 
hard pressed for money, and unable to 
secure loans to carry them through, have 
been selling cows as well as steers for 
beef. The California Cattlemen's Associa- 
tion estimates that in California the nor- 
mal ratio of cows to cattle slaughtered is 
25%, while this year it has been 38%, 
and predicts a further shortage of breed- 
ing stock next year. 

Consumption of beef in this state is ap- 
proximately 500,000 head per year. At 
the time of the census (January, 1920), 
there were 441,000 cows of calf-bearing 
age (2 years and over) available. On the 
basis of a 70% calf production, about 
normal for the state, these would yield 
308,000 calves per year, about 25 9? of 
which should be kept for breeding pur- 
poses, leaving 231,000 calves to grow up 
for beef. Of the 441,000 breeding cows 
now on farms and ranges, one-fifth, or 
88,000, would be available for slaughter 
each year, since a cow is not kept for calf 
bearing after it is 5 years of age. There 
are also about 800.000 dairy cattle in the 
state. These will supply about lO^V of 
our beef, or 200,000 head, this year. 

From the three sources of supply, 
therefore, we would obtain 231,000, 
88,000 and 200,000 head, respectively, or 
a total of 519,000, against a consumption 
of 500,000. The apparent margin of 
19,000 is just about sufficient to cover the 
regular annual 4% loss from disease and 

exposure. Obviously, therefore, if there 
is any considerable decrease in the number 
of breeding cows which were available 
last year, the coming supply of beef in this 
stale will be less than that of previous 

Consumption Below Production 

Compensating for the decreased pro- 
duction of beef cattle in the country dur- 
ing the past year, and probably a cause 
of any such shortage, is the decreased con- 
sumption of beef. The per capita con- 
sumption of beef in 1919 was 60 pounds. 
In 1920 it had dropped to 56.4 pounds, a 
decline in one year of 6%. More startling 
than these are the figures for the period 
from 1910 to 1920. During this time 
beef consumption per person in the United 
States decreased from 78 pounds to 56.4 
pounds, a decline of 27%. Decrease in 
consumption has been, therefore, much 
greater than decrease in production, and 
this without taking into consideration the 
almost complete cessation of beef exports. 

From these facts it would appear that 
although there is a slight numerical short- 
age of cattle this year, with prospects of 
an even smaller number on the ranges 
next year as a result of present slaughter- 
ing of breeding stock, the situation cannot 
be regarded as alarming from a food stand- 
point. There is no danger of a meat 
famiiie. When the supply of beef be- 
comes scarce, relative prices will cause 
people to eat less beef and more pork 
and mutton, or even substitutes for meat. 
As measured by demand there is no short- 
age of supply at the present time. Either 
demand must be brought back to normal 
by an adjustment of retail meat prices to 
popular buying power, or the supply even 
further reduced, before the economic law 
can operate to raise cattle prices. 

An Offer of Service 

The Department of Research and Service of the Security 
Trust & Savings Bank is prepared to furnish complete and 
accurate information regarding any line of business, whether 
conunercial, agricultural or industrial, of Los Angeles and 
Southern California. 

The services of this Department are offered, free of 
charge, to anyone desiring such information, and the Depart- 
ment will make detailed surveys and reports for the benefit 
of those interested. 

The work of the Department is carried on by men 
specially trained in research, and familiar with the business 
and financial conditions of this section. 

A well-equipped library is maintained by the Department 
to facilitate its services. 



r MPa".« ' j g t m^M^ ' -^.i. -^ ^■".m ' \ T :rj m 



lius h...l IN ciiK .'11 tlu Jatc irKliuitid kli.w. ..r .if tlu 

cxpirati.-n of a dctiiuic ixiu.J .itttr tlic a.itt ..t, .is 

pr..vKk.i hv the lihiarv riilcs or by >pccial«.mtnt xMth 

the I.ihr.iri.m in ih.ii.i;L. 





t':i»(P''M ,H,iMi-,K 



5'ockfoo. Co/if.* 








Security Trust 5: Saviiv;s 
Ban]:, Los .-.ix^elec. Dept. 
of ..eaearch and Service. 

The cattle-raisinr; in- 
dustry'- of the oouthv/est. 

FEB . 1S57